Even if calREDD offers their MLS for free, it will take a decade or more to unite the state. CARETS may accomplish that goal first.

If I understand the CARETS governance, they will gladly accept real MLS into their data share that adopts their rules and pays. As soon as CALMLS becomes a living MLS, either through buying another MLS or launching calREDD in the 4 markets they have signed up – they would qualify.

IMHO: calREDD joining CARETS is recognition and an admission by CAR that the facts on the ground have evolved since their MLS initiative was formulated. The basis for the CAR initiative was to address broker fatigue with the overlapping markets. That in turn encoraged a reorganization by incumbent local MLSs and Associations. The northern and southern CA data sharing programs have addressed many overlap issues in an effective and efficient way. This represents a new equilibrium where CAR will hope to passively accrete its MLS base rather than attempt to more aggressively consolidate large market areas.

As a Texan, I don’t feel qualified to disagree with Victor about “Everybody in California wants Statewide Data”, but that is not the sense that I get from brokers or MLS staffers that I know in California. I get the sense of a large and diverse state with a lot or regional pride for its distinct geographies. Are there really many brokers in the Bay area feeling the need to list and sell in SoCal, or vice versa?

We have done some pretty deep research on calREDD and CALMLS. Although they new and have not yet established the level of services of a regional MLS – they do have a good product road map and there is no reason to doubt that they will not follow it.

Consider the plight of the small sub 500 member Association-owned-MLS with no nearby regional alternative. It may not be possible to have the staff or the budget to operate and deliver a full service MLS to their members. These small orgainzations are also unlikely to offer their subscribers components like customer support, data compliance, security, listing syndication, etc. without charging a significant premium in dues.

I believe that CALMLS may offer them a valid product offering at a reduced cost and (potentially) superior services than they have access to today.

By focusing on the small MLSs, CALMLS has a pretty good chance to grow and be an attractive and beneficial offering to this market segment.

p.s. – calREDD has not joined CARETS – they will not be able to submit an application to join until they become an MLS – which they are not today(apparently).

When they submit their application, they will need to adopt the CARETS rules – which are different than the calREDD rules. Somebody’s rules will need to change.

I would doubt that CARETS will change their rules to suit the 1800 members of calREDD – especially given that it took them years to get everyone to agree to the standard set by CARETS. So, calREDD will need to consider modifying their rules.

The rules across the state are all quite similar, so it may not be a big deal to work out the differences – but hey – ya never know.

I agree with Victor that short term the calREDD solution can make sense for the smaller, more isolated MLSs throughout the state. Not only do they give them the opportunity to a pretty cool product (Concentric), assuming it works, they can actually be the MLS in many respects. On the other hand, this “being the MLS” is what is going to keep them from getting broad acceptance in the long term because of the impact on local control in creates and the extra layer of bureaucracy that has to occur with calREDD serving as the middleman between the MLS and the vendors. I also agree with Sam that joining CARETS shows how things have evolved and I don’t see how this is going to do anything other than slow up their own mission. I think calREDD would have better traction getting MLSs on the same platform over time if they gave two options, one a straight vendor option where they simply serve as a procurement channel for attractive pricing on the Concentric system, and two, the option where you actually get MLS services through calREDD. Without that, I think it is going to be hard for any well run regional MLS to see a real advantage in their approach since they lose local control and already have their data issues pretty well addressed via CARETS or other regional initiatives. The first thing that has to happen regardless is the successful deployment of the Concentric MLS system. Reactions to the UI (eye candy) have been very positive so the next few months will be fun to watch to see how it works in the real world.

I’m not sure if Victor and Mike mean something else or if I’m just not understanding, but the idea that smaller MLSs somehow need calREDD to help them provide a cost-effective and feature rich MLS service to their customers is false. The only question is whether there is overlap that makes data sharing and rule normalization a benefit.

And it seems reasonable to believe that Andy et al and the other California providers are working furiously, in stealth mode, to introduce their own big time improvments when and/or if Concentric/calREDD happens!

To Mike Wurzer’s comments, I don’t disagree regarding the technology..there are a number of good, cost effective systems they can choose from including FlexMLS. I was referring to the fact that calREDD actually becomes the MLS as well, which might be attractive for some of the smaller MLSs in the state. But, on the other side this is why it won’t work for the larger MLSs. I agree with Gregg that the CA regionals are among the best run in the country. In my post I said..”I think it is going to be hard for any well run regional MLS to see a real advantage in their approach…” As Art Carter said on a panel at Inman in January on the whole topic, it looks like a solution looking for a problem. I pointed this out in post I did after Inman on our blog, titled “Who should drive the real estate bus?” My thought then, as it is now really, is that the regional MLSs are doing a great job addressing their issues locally, so why try to address the issue all over again. http://waves.wavgroup.com/who-should-drive-this-real-estate-bus-1#more18356

Hang on a minute……… Mike said “The first thing that has to happen regardless is the successful deployment of the Concentric MLS system.”
Assuming that happens, won’t Rapattoni and the others want to roll out their own new & improved widgets to head off defections to calRedd/ Concentric??
If so, my handle is perhaps Mr. Convinced!

@Mr.Concerned Most MLS vendors, at least the good ones, are constantly improving their product. When Concentric launches they become just another MLS vendor, they will have to compete just like everyone else. I doubt any large MLS would want to sign with them due to the fact they haven’t proven themselves. It’s a marathon, not a sprint.

Michael – small MLSs pay a lot more for services than regional MLS due to their small size.

In talking to MLS CEOs in California, calREDD is offering their services at a price that is about 50% more than a regional who hosts their own system, about 30% to 50% less than a large regional that does not host, and about 50% to 75% less than a small mls pays (these are very general factors as prices vary widely from market to market).

This fee benefit to small MLS is exacerbated when you consider that the pricing discounts extend across all services purchased by the small MLS – Tax, Mapping, Data Compliance and other third party applications.

I submit this with one reservation – today, like many small MLSs, calREDD is a small MLS (and not likely to be getting the good rates that are available to large regionals). They will need to subsidize their offering during their ramp process to represent this value in order to win customers. It appears that the will of the C.A.R. board of directors is to invest an initial $3 Million toward this effort – and I imagine they will commit more if calREDD is meeting their business goals.

All of these savings come at the cost of relinquishing their current MLS governance and adopting C.A.R.’s. This could be good or bad, depending on the situation. Consider the plight of an Association owned MLS which is out of reserves and barely breaking even.

Here is my hope –

WAV Group and other consultants (Cohen, Larson, Sherry, McQueen, Bailey et al.) offer deep consideration of business and vendor options specific to the circumstances and needs of each individual MLS and Association engagement. My only hope is that MLSs and Associations who do not have experience weighing choices in these matters don’t put an ad hoc committee together and wing it.

Michael, I echo much of what Victor said. I’m not saying this is the approach I would recommend at all, just that this may be an option to consider for smaller MLSs, especially those that are barely breaking even, as Victor says.

>>In talking to MLS CEOs in California, calREDD is offering their services at a price that is about 50% more than a regional who hosts their own system, about 30% to 50% less than a large regional that does not host, and about 50% to 75% less than a small mls pays (these are very general factors as prices vary widely from market to market).

This fee benefit to small MLS is exacerbated when you consider that the pricing discounts extend across all services purchased by the small MLS – Tax, Mapping, Data Compliance and other third party applications.<<

I'd love to see the actual data for this. You know, real, hard data as opposed to off-hand supposition. I have pretty intimate familiarity with the costs of running MLS systems along all the lines you mention, and if we were able to see the data on which you make your claim, I think we'd quickly find the out of pocket costs to the agent are not dramatically, if at all, lower for larger versus smaller MLSs. But we need to make sure you're comparing apples to apples and not apples to oranges.

As I said before, I believe the issue for the smaller MLSs is whether they have overlap with other markets. That's where cost savings may occur, by elimination of duplicate fees, entry, etc. If overlap is not involved, I would like to see real numbers showing out-of-pocket cost differences to the agent.

>>In talking to MLS CEOs in California, calREDD is offering their services at a price that is about 50% more than a regional who hosts their own system, about 30% to 50% less than a large regional that does not host, and about 50% to 75% less than a small mls pays (these are very general factors as prices vary widely from market to market).

This fee benefit to small MLS is exacerbated when you consider that the pricing discounts extend across all services purchased by the small MLS – Tax, Mapping, Data Compliance and other third party applications.<<

I'd love to see the actual data for this. You know, real, hard data as opposed to off-hand supposition. I have pretty intimate familiarity with the costs of running MLS systems along all the lines you mention, and if we were able to see the data on which you make your claim, I think we'd quickly find the out of pocket costs to the agent are not dramatically, if at all, lower for larger versus smaller MLSs. But we need to make sure you're comparing apples to apples and not apples to oranges.

As I said before, I believe the issue for the smaller MLSs is whether they have overlap with other markets. That's where cost savings may occur, by elimination of duplicate fees, entry, etc. If overlap is not involved, I would like to see real numbers showing out-of-pocket cost differences to the agent.

Also, given the lack of traction developed by calREDD to date, each MLS needs to figure out if their neighbors are going to be joining and, if they're doing that, they can just as well consider all vendors instead of just one, because any vendor can provide the regionalization desired if the MLSs are intent to combine anyway.

Victor and Mike, I agree that each MLS needs to consider all their options and the costs associated. What concerns me are blanket statements about small MLSs and the costs without details.

Though there can be economies of scale for larger MLSs on software license acquisitions, I challenge the general proposition that out-of-pocket costs for brokers/agents is less for larger MLSs than smaller ones. I’d love to see the hard data on that. Especially when one considers giving up the responsiveness of local MLSs for the bureaucracy of a one-size-fits-all solution, the cost-benefit analysis goes far deeper than a software license. Hosting and support costs do not get dramatically less as you add more members, and most MLS vendors today are already spreading those costs through unified data centers more than even the largest regional MLSs.

As I mentioned in an earlier comment, the cost savings for any MLS in considering regional solutions depends on the overlap with other MLSs and whether duplicate fees, entry, etc., exist. If there isn’t overlap, there likely isn’t going to be any cost savings either, regardless of the scale.

Also, given that calREDD hasn’t achieved wide adoption, each MLS will have to consider whether they will get the regional partnerships they need. Further, if the MLSs are going to regionalize, they could do so with any vendor and so should consider all potential solutions.

I realize I’m biased in this discussion but I think there’s too much danger from generic statements like those in the comments above leading MLSs to believe they don’t have a choice and it will be cheaper and better without evaluating their options. Competition is what produces efficiency and lowest cost over the long run, not going with a single vendor.

Mike W – I totally agree. Small Association owned MLSs may be offered an advantage by calREDD, but careful comparisons should be considered.

The object of the conversation that seems to be missing from the banter among C.A.R. Association Directors is the notion that that the local MLS goes away. What we hear and read focuses on “statewide data” or “cool MLS system.” calREDD goes way beyond data sharing or an MLS system – it is Governance, Operations, Services, and System.

There are more small associations that are perhaps more likely to benefit from Operational, Service and Governance than large regional MLSs.

@ Mike Wurzer…to be fair, neither Victor nor I ever said anything about “…leading MLSs to believe they don’t have a choice and it will be cheaper and better without evaluating their options.”

I definitely agree with your comment about competition though there are times when it makes sense for MLSs, once separate, to join on a common platform. When and if that is needed in any given area I would encourage any MLS to look at all options including those mentioned above as well the rest, such as FBS and the other solid vendors.

As I stated in an earlier WAV Group blog post, I think the big MLSs in CA have proven they are getting the job done so I don’t expect them to change course in the near term…no upside for them at all. On the other hand, I would expect if Concentric proves they have a stable solution that they will get a look and evaluation just like any other vendors but that will take time….with the added complication that going with them via calREDD is not a simple client vendor relationship.

In today’s post, “calREDD, as we know it, is dead”, Greg says, “If C.A.R. thinks that the existing MLS vendors will not fight to keep their customers then they REALLY don’t understand the MLS business.”
Exactly what i was trying to say in comment #16, above!! And if they are as smart as me, they will go beyond Greg’s “….constantly improving their product”, and have their own newer, faster, better roll-outs; it would be prudent to be ready just in case Concentric’s product is really terrific, as some have predicted! A good way to get in trouble is to underestimate the other guy!

Archives

Admin

Find out what your Huntington Beach Home is Worth!

Looking To Buy?

About

This blog is dedicated to the real estate technology industry, from the Vendor’s POV. Lately I’ve been writing reviews on new products and websites. I also love to cover trade shows and conferences and keep up with all the major industry players. It’s an exciting business will a lot of colorful, smart and talented people.

So set your reading glasses to ’satire’, and join me as we try to make sense of the crazy business known as real estate.